Business activity in Nigeria slowed to its weakest level in seven months in June 2025, according to the latest Stanbic IBTC Bank Purchasing Managers’ Index (PMI) report. The headline PMI dropped to 51.6 in June from 52.7 in May, indicating a continued, albeit slower, expansion in private sector activity. This marks the softest pace of growth since the current recovery phase began in late 2024.
The report reveals that, although the PMI remains above the neutral 50.0 mark—signifying ongoing improvement in business conditions—the rate of progress has become more modest. The slowdown was attributed to weaker growth in output, new orders, and purchasing activity.
This dip in momentum came as inflation showed signs of easing. Data from the National Bureau of Statistics (NBS) indicated that Nigeria’s headline inflation rate fell for a second consecutive month in May, declining to 22.97% from 23.71% in April. On a monthly basis, inflation eased to 1.53%, down from 1.86%, suggesting that ongoing economic reforms may be starting to have an effect.
Analysts attributed the disinflation mainly to lower cost pressures in key sectors such as food, utilities, healthcare, and clothing. Still, businesses continued to experience rising input costs, though the rate of increase slowed significantly.
The PMI report noted that companies raised their selling prices at the slowest pace in over two years, reflecting growing caution in passing on costs to customers in a price-sensitive market.
Despite cooling inflation, overall business sentiment remained mixed. Output, new orders, and purchasing activity all grew more slowly in June. The manufacturing sector, in particular, dragged down overall performance, as it experienced a decline in production. Meanwhile, agriculture and services saw moderate growth.
The report also highlighted that new business volumes rose at their slowest pace in five months, with firms pointing to reduced customer demand. While some businesses managed to attract new clients, the pace of expansion was weaker compared to earlier in the year.
Employment remained largely unchanged in June, following a slight decline in May. Purchasing activity grew only slightly, marking the slowest rate of increase since the recovery began. Consequently, inventory levels also grew at the weakest pace in seven months.
Operational challenges continued across industries, with a third consecutive monthly rise in backlogs of work. These were largely due to supply chain disruptions, delayed client payments, and ongoing electricity shortages—all of which continue to hinder productivity and operational efficiency.
However, the outlook for the future improved significantly. Business confidence surged to its highest level since August 2022, as many firms expressed optimism about future output, driven by anticipated investments in infrastructure and expansion plans.